Perth-based Triangle Energy (Global) Limited (ASX:TEG), an experienced and successful oil production & exploration company, has published interim financial report for the half-year ended 31 December 2019. The Company holds an extensive operational experience of more than a decade in the oil & gas sector in Australia and Indonesia.
TEG has a 78.75% ownership stake in the flagship operation Cliff Head Oil Field, which includes the onshore Arrowsmith Stabilisation Plant and offshore Cliff Head Alpha Platform, in the Perth Basin. The field under the production licence WA-31-L is located 12km off the Dongara coast at a water depth of 15-20m
Apart from the Cliff Head Oil Operation in the highly prospective and underexplored Perth Basin, the Company has a 45% JV interest in Licence TP-15 including the Xanadu-1 oil discovery and a 50% participating interest in PL L7(R1). In State Gas Limited, TEG holds a substantial equity interest of 32.71%.
Cliff Head Oil Production Touches 1,000b/d in First Half
TEG is producing oil at the field from five production wells.
However, during mid-March 2019, production was ceased at the CH-13 well following a technical issue with the downhole electric submersible pump (ESP). Consequently, TEG carried out an optimisation review and change of methodology for-
- Minimising the well downtime with a significant reduction to the Electrical Submersible Pump (ESP) turnaround time for ESP workovers
- Reduction in workover expenditure on Cliff Head wells
- More reliable and safer operational conditions
On 13 December 2019, the CH-13 well resumed production following the ESP workover and on 16 December 2019, TEG announced the steady-state production rates for the Cliff Head field at 970 bopd from all the five operating wells, with CH-13 contributing 150 bopd. The ESP ramped up the production rates by 20 December 2019 to an optimised level of over 1,000 bopd.
The field produced 16.21 million barrels of oil as at 31 December 2019, with oil sales revenue of $7.67 million at a production rate 794 barrels per day from 1 July 2019 to 31 December 2019.
CHRP Aimed to Extend Economic Life Commences
Triangle Energy remains committed to further expand the production capacity and economic life of Cliff Head Operations under Cliff Head Renewal Project (CHRP). The Company has prioritised potential targets close to the Cliff Head platform with minimum capital obligations from the existing cantilevered jack-up rig.
TEG initiated the Cliff Head Renewal Project with three prime objectives-
- Mineral Reserves Expansion
- Higher Production Capacity
- Economic life extension beyond 2030
Cliff Head holds reserves of 1.71 MMstb (million stock tank barrels), with 2C Contingent Resource of 3.13 MMstb to be added, once the final investment decision is made on the prioritised targets at the Cliff Head Renewal Project.
A thorough evaluation for the future opportunities prior to the investment decision started in mid-2019.
Under CHRP, 4 major prospects have been identified and evaluated to recommend–
- CH11 well workover- The water injector well will switch to an oil-producing well. The workover program anticipates a production of 500 bopd on completion with contingent resources estimated at 0.28 MMstb of crude oil.
- West High Evaluation & Development: As per the current understanding, West High appears to be a robust and attractive opportunity. The appraisal and evaluation of the prospect would be finalised on the interpretation of the reprocessed 3D seismic data that would help develop a better understanding of the structure of the reservoir. An estimated 1.42 MMstb of contingent resources is held at the West High prospect.
- South East Nose Development: The new well up-dip seems promising with evaluation concluding with finalising of the 3D seismic data interpretation. The prospects hold a contingent resource of almost 1.43MMstb.
- Mentelle- Mega Discovery: A detailed review of the Mentelle Updip prospect has commenced. The prospect is being evaluated extensively for drilling based on the existing seismic data and interpretation. The D3 reservoir indicated the presence of oil near the existing offshore platform. ~3.3 MMstb of prospective resources are held within Mantelle at the best estimates. Further drilling studies are being scheduled without the acquisition of further seismic data due to economic constraints.
Triangle Energy aims to almost quadruple its throughput capacity to 4,000 bopd by 2021 with the extension of economic life of Cliff Head Oil operations to beyond 2030. The seismic interpretation review indicated the possibility of additional exploration and appraisal opportunities within the Cliff Head field region, and these will be evaluated from the interpretation of the reprocessed data.
Prospects within CHRP would be prioritised during Q1 2020 with scheduling of the drilling program and recommended workovers.
TP/15 Xanadu - Progressing Towards Advanced Drilling Program
TP/15 Xanadu Project is located almost 14km southeast of the Cliff Head Field. The maiden drilling program on the Xanadu-1 prospect had earlier confirmed intersection with crude oil hosting reservoirs. The drilling results indicated similarities between Xanadu-1 and Cliff Head field, substantiated by the fact that the two fields share the same reservoir. The JV partners remain optimistic on the Xanadu-1 well, which demonstrated the first moveable oil in TP/15.
On 31 May 2019, a 3D seismic program was commenced to cover over 40km2 of TP/15 and was completed in July 2019. And, Triangle Energy expects an improvement in the reservoir quality to the west of the Xanadu structure.
The Company is encouraged by the possibility of additional prospectivity in the TP15 permit and would coordinate with the co-owners to further evaluate and appraise the additional prospects. Acquisition of low-cost 2D seismic data for the West Xanadu area is under discussion.
Farmout Completed for Mt Horner Production Licence L7(R1)
On 2 October 2019, Triangle Energy announced to have completed a farmout agreement, earning a 50% stake in the Mount Horner Production Licence and securing the right to assume the licence operatorship. Future activities and finances are currently under discussion and will be planned accordingly.
State Gas - Investment Value Higher than TEG M-Cap
Triangle Energy holds a significant investment in Bowen basin-focused State Gas Limited (ASX: GAS). The Company holds an interest of 32.71% in GAS, equivalent to ~$21.52 million (as of 12 March 2020).
Triangle Energy is focussed on establishing a yet stronger position in the Perth Basin through its portfolio of oil prospects. The Company anticipates producing almost 4,000 bopd per day by 2021 with further economic life extension at the Cliff Head operations. Advancement on the other projects would enable TEG to further grow and scale up its output from the Perth Basin.
On 12 March 2020, TEG closed the day’s trade at $0.025, with a market cap of $10.1 million.
